SIE practice questionmediumMarket Manipulation - Pegging
A broker-dealer continually enters buy orders to artificially keep a stock’s price above a certain level. This practice is known as:
- AA hedging strategy
- BPegging and is prohibited market manipulation✓ Correct answer
- CCovered call writing
- DPortfolio rebalancing
Explanation
Why B — Pegging and is prohibited market manipulation
Pegging involves artificially supporting a security’s price and is prohibited. The other strategies are legitimate and do not involve price fixing.
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